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Another one bites the dust: proposed sale of Hawker IGA to Woolworth

By 18 October 2012 32

In what looks like another nail in the coffin of competitors to the big two supermarket chains — as well as validation of community concerns expressed during the mishandled draft Hawker Master Plan process — Woolworth has made an offer for the Hawker IGA.

There are a lot of interesting things about this, not least the fact that the story was carried yesterday (17 Oct) by the Australian Financial Review, with, extraordinarily, not a peep from the Canberra Times or other local media. The AFR’s focus was on what Woolworth is up to in terms of expansion, and the fact that the proposal is current the subject of an ACCC review.

There are a lot of uncomfortable things about this, including the lack of transparency on the part of one of the IGA owners who was a member of the draft master plan Reference Group during protracted discussions about the master plan without coming clean about his intentions and negotiations with Woolworth.

As the AFR notes, the IGA owner ‘agreed to sell his Hawker store after Woolworths offered 17 times weekly earnings, “an offer he couldn’t refuse”. However, Woolworths said it had been approached by the owner and … agreed to buy the freehold site, supermarket business and liquor licence, pending ACCC approval.

… The ACCC’s review will consider Woolworths’ existing presence in the local market. Woolworths has four supermarkets within three to six kilometres of Hawker, Coles has two and Aldi three.”

The Hawker IGA is popular with shoppers for the friendliness of its staff and for the accessibility of parking, as well as for its quirky supply of out-of-the-ordinary continental groceries (and, I might add, the best choices of Moscato in Belconnen).

Closing date for submissions to the ACCC review is 5 November.

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32 Responses to Another one bites the dust: proposed sale of Hawker IGA to Woolworth
#1
theoutsider9:30 pm, 18 Oct 12

Haha, this is too funny. The Friends of Hawker Village (a group I assume the OP is a member of?) never accepted the validity of an independent retail study by Macroplan that showed the Hawker shops is underperforming and not attracting the retail spend it should and white-anted the entire consultation process, but then a major retailer realises the Macroplan data is sound and wants to buy in.

#2
ps010411:41 am, 19 Oct 12

Can anyone with a much better knowledge of ACCC processes than mine shed any light on whether the reviews is a mere technicality or if there is a significant chance it could be knocked back?

While I acknowledge that there are challenges attached, on the whole I would see this as a positive. A woolworths will likely draw more people in the area which is good for the other surrounding businesses and will hopefully help drive a facelift to the ugly nature of those shops.

#3
KandyA3:48 pm, 19 Oct 12

BOOOO!

where will I then find such a selection of pickled vegetables from Eastern Europe?

(Im pretty sure there are none left in eastern europe, what with the bulk amounts currently available at Hawker IGA). I actually enjoy shopping there, linger in the preserved veg section, its quite…. continental. I guess their liquor license did in the former bottle-o ~15yrs ago that itself had the best range of brews available in a corner shop.) Hawker – unexpected diversity, to be undiversified. Its currently the only succesful remnant of the community shopping precinct that I can think of, hope it doesnt lose its charm!

#4
Dacquiri7:10 pm, 19 Oct 12

The loss of pickled vegetables from Eastern Europe will be the least of your problems. Try: the over-development, the loss of convenient car parking, and the demise of small independent shops — in other words, all the things that formed the basis for the rejection of the badly-devised ‘draft master plan’ that the LDA tried to force on the community.
Given Hawker’s proximity to the expanding Belco Markets, as well as to Jamison, Westfield Belconnen & Kippax, it’s hard to make the case that public interest (or any form of ‘supermarket competition’) would be served by turning that supermarket into a Woolworth. The MacroPlan study was flawed beyond belief and was at odds with the shopper surveys. Really, there is only so much shopping dollar to go around, and any additional spend that Hawker picks up will be at the expense of somewhere else. Hawker shops have a particular clientele, supported by patients who visit the co-located medical centre & allied health professionals, as well as tradies who can actually park their trailers and large vehicles there. The IGA attracts customers for the convenient parking, the personable staff (& no infernal ‘self-check-outs’) and the good ‘specials’, as well as for the continental foods not found elsewhere.
The shopping centre would benefit from some modernisation — not from what appears to be vicious sabotage by TAMS, who have removed the wisteria covering on the pergola and replaced it with a stark metal cage.

#5
Thumper7:19 pm, 19 Oct 12

This is just wrong.

The way we are heading we will end up with a world where you have a few shops, Woolworths, Coles etc and a few mega clubs.

Everything will simply be crushed by these giants.

Small pubs and shops can never hope to compete and the big entities can simply lower prices until the competition is gone.

Not a thing to look forward to hey?

#6
clj7:22 pm, 19 Oct 12

That’s a real pity. The Hawker IGA is very accessible, not least because it isn’t humungous, and of course parking nearby etc. Somebody I know with a mobility impairment goes there for her shopping even though Jamison and Belco are closer, simply because it’s that much less of an ordeal (though bigger than Cook which doesn’t have the variety).

Also last time I was in Hawker shops the Eastern European aisle was pretty much cleaned out. And I agree, Dacquiri, that wisteria was beautiful.

#7
maxblues8:11 pm, 19 Oct 12

This has been common knowledge amongst Canberra retail community, so just assumed pollies were trying to keep it quiet until after election.

#8
Kim F8:15 pm, 19 Oct 12

how do they work out there are 4 Woolies within 6km? Belconned & Kippax yes, Not Dickson or Coolamon surely

#9
Muttsybignuts9:46 pm, 19 Oct 12

Thumper said :

This is just wrong.

The way we are heading we will end up with a world where you have a few shops, Woolworths, Coles etc and a few mega clubs.

Everything will simply be crushed by these giants.

Small pubs and shops can never hope to compete and the big entities can simply lower prices until the competition is gone.

Not a thing to look forward to hey?

What do you mean “they way we are heading”?. I think we are already there!

#10
Muttsybignuts9:48 pm, 19 Oct 12

Wouldn’t it just be a case of IGA moving out and Woolworths moving in? A new bit of signage and the dreaded self serve checkouts? If that’s the case then surely not much will change.
Or, is Woolworths looking to bulldoze and rebuild bigger and better? I doubt it.

#11
Dacquiri10:50 pm, 19 Oct 12

It may start out that way – and then again, it may not. The current IGA size is apparently smaller than a ‘full service’ supermarket (that the Coles & Woolies usually consider suitable for their requirements), and there was a big push by the IGA owners, as part of the master plan, to give them an expanded ‘footprint’ which would involve building on the site of the nearest surface car park. Not sure what they can do in the short-term, given ACT Govt statement re ‘no Government development for 3 years’ — presumably that could change with a new Govt, who could find a ‘reason’ to sell the car parks, after all.
There needs to be a combined community-traders-landlord initiative for Hawker: traders need to be up-front about what they want (some want larger premises — and some traders are also building owners); the numerous landlords need to get their act together to make the place look more attractive; the community, as centre users, need to have a voice; and ACT Govt needs to agree to not enhance, and not to destroy, the things that bring people there. IGA owners will make a tidy profit if they sell to Woolworths, but it’s doubtful that anyone else will benefit.

#12
Dacquiri10:52 pm, 19 Oct 12

Sorry, slip of the keyboard — that was supposed to be: ‘ACT Govt needs to agree to enhance, and not to destroy, the things that bring people there.’

#13
Chello11:28 pm, 19 Oct 12

It’s all about $$money$$ and how much more one can get! And..@ theoutsider…I don’t believe the Macroplan data was white-anted – did you actually look at ‘THE MASTER PLAN’ for Hawker Shops?
Now unfortunatley it looks like the owners IGA Hawker are out to get what they can.

#14
Comic_and_Gamer_Nerd7:45 am, 20 Oct 12

No point whinging really. It’s how the world works. Don’t get me wrong, I hate woolworths and Coles and only shop there out of nesecity. Meats and veg I get from butchers and markets and small items from iga, but who is anybody to tell the iga owners what they can and can’t do with their business?

#15
maxblues11:53 am, 20 Oct 12

The owners of Hawker IGA also own several other supermarkets, including Lyneham and Karabar, so will they be offering these to Woolworths in future?

#16
RB7812:04 pm, 20 Oct 12

Kim F said :

how do they work out there are 4 Woolies within 6km? Belconned & Kippax yes, Not Dickson or Coolamon surely

Dunlop and Charnwood?

maxblues said :

The owners of Hawker IGA also own several other supermarkets, including Lyneham and Karabar, so will they be offering these to Woolworths in future?

The ACCC previously blocked Woolworths from taking over the then Supabarn (which was owned by an independent franchisee) at Karabar. IIRC, Supabarn wanted to buy the store from the independent franchisee, who ended up selling to the IGA owner instead – http://www.accc.gov.au/content/index.phtml/itemId/833138/fromItemId/751043

That all said, very unlikely that Karabar would go to Woolies. (can’t speak for the other stores)

#17
pepmeup12:36 pm, 20 Oct 12

I assume is 17 times weekly takings not earnings

#18
lostinbias2:21 pm, 20 Oct 12

maxblues said :

The owners of Hawker IGA also own several other supermarkets, including Lyneham and Karabar, so will they be offering these to Woolworths in future?

Krnc Group. One of the larger IGA operators in the Canberra area. They also operate Independent Liquor Retailers (Local Liquor). It’s interesting to see that they’re selling stores and it makes me wonder about the IGA model in Canberra.

I wonder if this trend will continue, and local IGAs will continue to be swallowed up by the majors.

….or they’ll jump ship…..

#19
Dacquiri11:38 pm, 06 Dec 12

In its eagerly anticipated decision about the proposed sale of the Hawker IGA to Woolworths, the ACCC announced today that … it needs more information before making a decision. See the ACCC website for the Statement of Issues (‘Woolworths Limited – proposed acquisition of the Hawker Supa IGA’), which identifies issues about which more information is being invited. It is not clear what sort of information will count as the sort of evidence that the ACCC is looking for — short of conducting specific studies of shopping patterns and intentions and doing some in-depth questioning of relevant parties, it’s hard to see how some of this information will be generated. (Surveys of Hawker centre shoppers were conducted as part of the master planning exercise which is now on ice.) However, it’s interesting that the proposed sale was not just rubber-stamped. This is also an interesting case in that the Hawker IGA owners also own the building and so can presumably do whatever they like with it if the sale is blocked. In the meantime, ACTPLA has issued a proposed precinct code (unusual, in the absence of a master plan) which would allow building on the Government-owned car park nearest the IGA.

#20
JC7:29 am, 07 Dec 12

lostinbias said :

maxblues said :

The owners of Hawker IGA also own several other supermarkets, including Lyneham and Karabar, so will they be offering these to Woolworths in future?

Krnc Group. One of the larger IGA operators in the Canberra area. They also operate Independent Liquor Retailers (Local Liquor). It’s interesting to see that they’re selling stores and it makes me wonder about the IGA model in Canberra.

I wonder if this trend will continue, and local IGAs will continue to be swallowed up by the majors.

….or they’ll jump ship…..

The IGA model is fine. The companies and not I say the word companies (they are not mum and dad shops as IGA makes out) are there to make money. If they make money by selling to Wollies or Coles then they will. Then after they have sold them they will then go on their campaign about how bad Woolies and Coles are and how people should shop ‘local’, until such time as they see another buck to be made selling another shop to the enemy. So pretty cleaver business model.

#21
460cixy7:56 am, 07 Dec 12

Shame realy I like shopping there I haven’t set foot in a f***ing woolworths in about four years and don’t plan on changeing any time soon.

#22
Deref8:21 am, 07 Dec 12

Thumper said :

This is just wrong.

The way we are heading we will end up with a world where you have a few shops, Woolworths, Coles etc and a few mega clubs.

Everything will simply be crushed by these giants.

Small pubs and shops can never hope to compete and the big entities can simply lower prices until the competition is gone.

Not a thing to look forward to hey?

Spot on.

I think it was Karl Marx who said that the inevitable result of unrestrained competition is monopoly. We’re well on the way.

#23
Mike Bessenger8:34 am, 07 Dec 12

JC said :

The IGA model is fine.

Really?
It would be interesting to know why several of the north side IGAs are now flying the SupaBarn banner.

#24
JC8:45 am, 08 Dec 12

Mike Bessenger said :

JC said :

The IGA model is fine.

Really?
It would be interesting to know why several of the north side IGAs are now flying the SupaBarn banner.

You missed one very important word, which was model. You should read my post in the context of the post I was replying to, that’s why I quoted it. In which case Supa barn IMO also follows the IGA model.

#25
gazket12:13 pm, 08 Dec 12

also you can be sure that Woolies will want to buy the servo at Hawker as well.

#26
Loxmyf2:03 pm, 04 Nov 13

Thread resurrection alert.

I was just in Hawker IGA and was told by one of the checkout ladies that it is closing this Sunday. It will reportedly open as a Woolworths at the start of December.

#27
nhand422:51 pm, 04 Nov 13

JC said :

The IGA model is fine. The companies and not I say the word companies (they are not mum and dad shops as IGA makes out) …

At least one of the Canberra IGAs is owned by a mum and dad (and brother). Nice people and they’ve done a lot of good work restoring our local shopping village.

#28
Silentforce3:52 pm, 04 Nov 13

Jimmy’s Deli at Belconnen Mall (post Westfield) offered off-mainstream deli items from Eastern Europe, UK and USA. Westfield cut him off at the nuts with their refurbishment policy. Go the big guys and those who support them. Eat Plastic!

#29
aronde1:24 pm, 19 Nov 13

Just as an update I was at Woolworths Belconnen yesterday and was amazed to see 8 checkouts open with staff standing behind them and no customers! The checkout guy said they are training the new staff for Hawker and it is due to open ‘next week’.

#30
JC5:22 pm, 19 Nov 13

aronde said :

Just as an update I was at Woolworths Belconnen yesterday and was amazed to see 8 checkouts open with staff standing behind them and no customers! The checkout guy said they are training the new staff for Hawker and it is due to open ‘next week’.

Well IGA Hawker has closed, they have repainted the outside and have up Woolworths and BWS signage, so moving along pretty quick.

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